SEBI focuses on cyber security, advises exchanges to boost IT infra to avoid repeat of CDSL breach

In a bid to enhance cyber security, the Securities and Exchange Board of India (SEBI) has advised exchange and market intermediaries to increase their expenditure on IT infrastructure.

SEBI has asked the exchanges and MIIs to spend a larger proportion of their income on cyberinfrastructure. With more financial activities including trading, banking and other happening online these days, cyber security continues to be a growing concern. Recently, SEBI conducted a brainstorming session on cyber security with exchanges and MIIs last week.

With only a few days left for the budget, Parliamentary Standing Committee on Finance is scrutinizing and reviewing the activities of several financial institutions including SEBI, RBI, and many more. Moreover, to enhance their efficiency, such bodies are also taking several measures.

SEBI said that the regulator itself will spend more on cyber security, after the cyber attack on Central Depository Services (India) Ltd or CDSL, the largest depository in India by a number of accounts.

CDSL faced a cyber attack on a few of its internal machines in November 2022.

 “Earlier today (Friday, November 18, 2022), Central Depository Services (India) Limited (CDSL) detected malware in a few of its internal machines," CDSL had informed the stock exchanges after the attack.

 “As a matter of abundant caution, the Company immediately isolated the machines and disconnected itself from other constituents of the capital market. As per initial findings, there is no reason to believe that any confidential information or the investor data has been compromised," said CDSL.

After the attack on CDSL, within a month, SEBI expanded two of its committees--High Powered Steering Committee on Cyber Security (HPSC-CS) and Information Systems Security Committee (ISSC)—with an aim to strengthen cyber security frameworks.